Wealthy Greeks are snapping up high-end properties in the prime London market as the fiscal crisis in their home country worsens, according to property agents.
Greece-based savers moved £8.8bn worth of deposits out of local banks in the first two months of the year – the equivalent of about 4.5 per cent of Greece’s total banking system – amid growing anxiety over the country’s debt crisis. Some of that money is now being channelled into the UK property market.
Chesterton Humberts, the estate agent, says it has seen an uplift in the number of Greek applicants and in sales of investment property to Greek buyers.
“Our Little Venice, Pimlico and Chelsea offices are all seeing more interest from Greek buyers seeking properties that can be readily rented,” says David Adams, residential director at Chesterton Humberts.
Robert Bailey, a buying agent, says that, as early as last year, estate agents in central London began to see an unprecedented number of enquiries from both Greek and Italian buyers.
“The advantage for these buyers is clear: they can expatriate funds out of their home country where tax rises and interest rate rises are inevitable and take advantage of the euro’s relative strength against sterling,” he says.
Bailey has been advising Greek buyers with budgets of between £1m to £5m who are looking for flats in Knightsbridge, Kensington, Chelsea and Belgravia.
Houses in Paris have also been attracting more interest from wealthy Greeks who view them as a blue chip asset offering long-term security of investment, according to Property Vision France, the buying agent.
“Clearly, a lot of recent interest has been prompted by domestic economic difficulties in their home country,” says Nigel Hindle of Property Vision France.
The strength of the euro and other currencies against the pound has also fuelled foreign demand for prime London property. Buyers from Europe, Hong Kong and the Middle East have been able to achieve between a 30-50 per cent reduction in price on their London purchase.
In 2009, 93 per cent of all Hamptons International’s purchasers in Knightsbridge, Belgravia and Mayfair were foreign nationals, up from 70 per cent the previous year.
“At the upper end of the market, there is continued investment from the Middle East, India, the Far East and ex-Soviet states but 2010 has seen marked increases in numbers of Chinese and Greek buyers,” says James Wardle of Hamptons.
Andrew Giller, head of London & home counties at The Buying Solution, the buying arm of Knight Frank, says foreign demand is not slowing down.
“We have seen an unseasonably high number of Middle Eastern clients, who historically head to London from May to June onwards. Around two in every five of our potential clients is currently from the Middle East,” he says.
Middle Eastern buyers are typically looking for one bedroom investment flats priced around £1m-£2m, or large family homes in excess of £20m in Belgravia and Mayfair.
Although the continued interest from international buyers will mean more local buyers are priced out of prime London locations, property agents say the influx has boosted prices, which have already risen by a fifth over the past year.
International buyers are also helping to stimulate the high-end new build market, says Ed Lewis, head of development at Savills. Foreign purchasers are more likely to buy new build developments than local buyers as they can have better access to finance.
“There are still issues with UK buyers for raising mortgage finance for new build properties but it is easier for international buyers as many countries are having a better recession.”